The IBM mainframe: Golden oldie or modern marvel?

While dissenters continue to challenge the validity of the mainframe, the technology keeps on proving its worth.

In a world where IT continues to power forward, the longevity of the mainframe and its place in today’s computing environment is increasingly being questioned. With ‘change’ often confused with ‘progress’, a mainframe’s durability can work against it. As demand grows for more agile and innovative systems, it is difficult to reconcile a technology in its sixth decade with the technology we carry around in our pockets or use at home.

But while dissenters continue to challenge the validity of the mainframe, the technology keeps on proving its worth. It underpins the business processes of many of the world’s largest financial, healthcare and insurance companies, and houses the majority of their most business-critical, valuable applications. Organisations charged with processing vast amounts of data will more likely use a mainframe as a central cog of their IT ecosystem. Against this backdrop of continued and widespread IT industry usage, this year marks the 50th anniversary of the mainframe.

The technology behind the scenes

Whether you’re online looking for an insurance quote, booking an overseas trip, or withdrawing cash from an ATM, mainframes are the power behind the screens. They support everything from a handful of terminals to tens of thousands of online screens. Companies harness their processing power and massive memory to support multiple gigabytes of main memory and terabytes of disk storage.

The mainframe has come to permeate almost every level of our day-to-day lives. From cash dispensers to online renewals, we interact with mainframes through the enterprise-scale applications they support. The proven combination of reliability, security, availability and performance make the IBM flagship a winning system that a risk-averse CIO is unlikely to want to change. Bearing in mind the consequences of system failure, it is an understandable attitude. More recent advances in the shape of IBM zEnterprise provide greater flexibility and improved TCO than ever.

However, the debate about the future of the mainframe continues based on two interlinked challenges facing IT leaders today. The first is on what Gartner calls ‘IT debt’, and the second is the IT departments’ ability to justify expenditure on mainframe applications.

According to independent global research conducted by Vanson Bourne, 68 per cent of CIOs and IT directors polled across Australia and New Zealand (ANZ) estimate that it would require an average of $9.78 million to bring their outdated mainframe applications up to date – an increase of almost half (48 per cent) from 2012 when the figure stood at $6.6 million. So there is a huge backlog of modernisation work needed to ensure the mainframe environment can deliver on today’s business demands.

The same research survey saw ANZ CIOs confirm they expect to rely on mainframe applications for another ten years, with almost half (48 per cent) believing it to be longer than this. However, despite the perceived longevity of mainframe applications, the majority of respondents (80 per cent) said they find it difficult justifying the expense of maintaining core applications. The result is that 68 per cent of CIOs admit their business is exposed to compliance and risk issues.

While core mainframe applications are often the lifeblood of the organisation, the burden of IT debt is on the rise. A major factor of this is that many think IT innovation only means brand new technology, rather than improving existing critical applications to deliver similar technology innovation advantages.

Throwing away many years’ worth of unique intellectual property in their mainframe systems in a replacement strategy remains, however, an almost unthinkable blend of eye-watering cost, unacceptable risk and a loss in a business’ competitive edge. CIOs are understandably hesitant to walk away from what works well today. What might be missing is contemporary technology to help streamline routine activities and supporting innovation. Such technology enables the modernisation of core mainframe systems to deliver business advantage faster, without the time, cost or risks of the ‘rip-and-replace’ alternative.

Since its inception, the IBM mainframe has undergone countless facelifts, upgrades and immeasurable improvements, by orders of magnitude, in terms of power and performance. Learning from the past success and continued enduring value of the mainframe and the applications they run, the IT leadership challenge as we look to the next 50 years of mainframe computing is to find smart ways to blend innovation projects with protecting and evolving their critical systems.

Tuning the engine rather than replacing the vehicle can improve value and deliver on the latest innovations, turning the mainframe from a golden oldie into a modern marvel.

IMPORTANT: This information is general financial product advice only and you should consider the relevant product disclosure statement (PDS) or seek professional advice before making any investment decision. Product disclosure statements for financial products offered through InvestSMART can be downloaded from this website or obtained by contacting 1300 880 160. You should consider the product disclosure statement before making a decision about a product. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.